[wellylug] 'Peering' changes set to hit internet businesses

[Jeremy Naylor]

NZ Herald

'Peering' changes set to hit internet businesses

24.05.2004

By JUHA SAARINEN

Internet backbone providers TelstraClear and Telecom are changing their 
policies around "internet peering", spelling profound changes for the 
internet industry.

Peering is internet jargon for the exchange of similar amounts and types of 
data between networks, usually free.

For New Zealand internet providers, peering allows traffic to be kept 
within faster and cheaper national networks instead of leaving the country 
and returning via slow and expensive international links.

But TelstraClear wrote to internet providers last week telling them that 
from November it will stop exchanging traffic with other providers 
nationally without cost.

Instead, a "commercial agreement for national transit" must be negotiated 
to access TelstraClear's networks, the company says.

And a move last week by Telecom to alter internet traffic routing has led 
the head of popular internet auction site TradeMe to accuse Telecom of 
using peering to leverage its monopoly on internet circuits.

TelstraClear spokesman Matthew Bolland said the telco had been "losing tens 
of thousands of dollars a month" by exchanging free data with local providers.

But increased internet traffic had raised network interconnection costs, 
claimed TelstraClear.

Internet companies who buy international bandwidth from TelstraClear must 
also buy national circuits to access TelstraClear's network.

A manager at one internet provider, who did not want to be named, said his 
cost had "gone from zero dollars to $1600 a month", because he now had to 
buy a dedicated circuit.

Brett Herkt, general manager of Auckland internet provider Maxnet, said he 
was unhappy with the new terms and would reconsider his $250,000-a-year 
outlay on TelstraClear circuits if the telco went ahead with its new 
peering plan.

Neil de Wit, managing director of Citylink, which operates the Wellington 
Internet Exchange (Wix), said peering was of huge benefit to the internet 
users.

"Peering means you make a local call instead of a long-distance one," he said.


Losing a peering arrangement can be devastating for internet providers. In 
November, TelstraClear decided to stop peering with Auckland Internet 
provider Iconz.

Traffic from TelstraClear customers destined for Iconz's networks in New 
Zealand went via Australia instead of the Auckland Peering Exchange in the 
Sky Tower. The longer and slower path meant that TelstraClear customers 
could not reach some Iconz-hosted customers like Kiwibank and NZ Post.

Last week, Telecom removed a route that directed traffic from peers at Wix.

This hit TradeMe hard, said general manager Sam Morgan. Instead of sending 
data locally in Wellington to Xtra, the traffic had to go via Auckland.

"Our bandwidth bill has tripled," Morgan said

Asked why Telecom had removed the route into its network at Wix, Xtra head 
of internet marketing Chris Thompson said it was due to a "router 
misconfiguration".

Thompson said the misconfiguration allowed non-Xtra-peered networks to 
connect to it via a "backdoor".

He recommended that TradeMe enter a bilateral peering arrangement with 
Telecom wholesale.

More at: http://www.nzherald.co.nz/index.cfm?ObjectID=3568316

Thanks,

Jeremy Naylor
p: +64 21 374 689
e: jeremy.naylor at r2.co.nz
w: http://www.r2.co.nz/~jeremy
w: http://e-living.wellington.net.nz 



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